Unix account aliases have been around for a long time; in Leopard, you can easily create such aliases for an account.

Why is this useful in OS X? For one example, you can use that alias anywhere you'd normally enter your short username: at login, in authentication dialogs, etc. If your "short" username is abnormally long, or if you just don't like it, aliases are one way to effectively get a different username (df instead of danfrakes) without actually changing your account's short name.

Control-click on your account name in the Accounts pane of System Preferences; choose Advanced Options in the contextual menu that appears.

In the resulting Advanced Options screen, click on the plus (+) button below the Aliases box.

Enter the alias, and then click on OK.

Restart (or just log out and then back in).

And yes, there's a Short Name field in the Advanced Options dialog. However, changing your short username here doesn't work exactly how you'd expect it to. I recommend not messing with that field; that's a hint for another day!